Constructing a Price Deflator for R&D: Calculating the Price of Knowledge Investments as a Residual

A study of industrial structure and growth, in terms of capital intensity and capital productivity of industries, inevitably encapsulates the requirement and associated challenges of estimation of capital stock time series in real terms. An incorrect (under- or over-) estimation of real capital stock leads to dubious conclusion and, thus, ill-informed policy implications derived from the analysis. The industrial survey database–ASI–reports the time series of capital stocks for industries in nominal (at current prices) terms instead of in real (at constant prices) terms which is more meaningful for the analysis. The choice of correct deflator, consideration of suitable depreciation, discard and revaluation of capital stocks, make real capital stock estimation a matter of disquisition. A plethora of studies addresses these challenges of capital estimation deploying perpetual inventory method. However, the approaches used in the previous studies pose limitations in terms of price deflator selection, consideration of benchmark period for initial capital and choice of depreciation rates and methods. The present study addresses these limitations for the registered Indian manufacturing industries. The result of the present study exhibits a robust approach of real capital stock estimate and an advancement from the existing approaches.

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Price convergence patterns across U.S. States

Panoeconomicus ◽

10.2298/pan160625008c ◽

2019 ◽

Vol 66 (2) ◽

pp. 187-201

Author(s):

Christina Christou ◽

Juncal Cuñado ◽

Rangan Gupta

Keyword(s):

Monetary Policy ◽

Market Integration ◽

Price Convergence ◽

State Variables ◽

Policy Decisions ◽

Paper Point ◽

Convergence Clubs ◽

Low Degree ◽

Price Deflator ◽

The U.S

This study examines the convergence patterns of prices across 50 U.S. states over the period 1960-2007, by applying the convergence algorithm developed by Peter C. B. Phillips and Donggyu Sul (2007). The empirical findings suggest the rejection of full convergence across the 50 U.S. states? prices, and the presence of 11 subgroups, or convergence clubs. The main implications of this paper point to the low degree of market integration across the U.S. states, the limitations of using a unique national price deflator to calculate real U.S. state variables, and the different effects that national monetary policy decisions will have on U.S. state prices.

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Effective Macroeconomic Model for GDP Analysis, Albanian Case

Academic Journal of Interdisciplinary Studies ◽

10.36941/ajis-2020-0084 ◽

2020 ◽

Vol 9 (5) ◽

pp. 38

Author(s):

Alqi Naqellari ◽

Vladimir Mici

Keyword(s):

Detailed Analysis ◽

Demand Curve ◽

Aggregate Demand ◽

Market Model ◽

First Year ◽

Real Gdp ◽

Macroeconomic Indicators ◽

The Government ◽

The Impact ◽

Price Deflator

The study aims to create a macroeconomic market model, through which to analyze nominal and real GDP, to analyze the impact of prices on GDP, create a model of aggregate demand curve, using price deflator, etc. It aims to calculate the Price Deflator and real GDP starting from 1990, as the first year of calculating the macroeconomic indicators of the Albanian economy. More detailed analysis is focused on the years 2000-2017. It has been proven that the deflator calculated by INSTAT is almost equal to the nominal GDP average of the price increase. This data was used to construct the market model with Albanian economy data, with Aggregate Price and real GDP. The new model of the aggregate market differs from the existing one. It expresses the nominal GDP curve as a listing of real GDP at and has a positive slope. This model enables a detailed analysis of nominal and real GDP can be used by anyone, and for any economy. It is recommended for the government and the Albanian institutions to apply this model, as it is effective. Statistical, econometric, analysis, synthesis, comparison, etc. methods were used in the analysis.

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